We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can ADI's Industrial Segment Sustain Its Momentum Through 2026?
Read MoreHide Full Article
Key Takeaways
Analog Devices' Industrial revenues rose 53% year over year to $1.97 billion in fiscal Q3 2026.
ATE and aerospace and defense lead growth, while automation offers a longer-duration opportunity.
ADI expects Industrial revenues to rise at a high-single-digit sequential rate in the upcoming quarter.
Analog Devices’ (ADI - Free Report) Industrial segment remains a key driver of the company’s broad-based recovery, supported by cyclical normalization and long-term demand for automation, semiconductor testing, aerospace and defense, energy systems and digital factories. Industrial revenues reached $1.97 billion in third-quarter fiscal 2026, which increased 53% year over year and 10% sequentially, representing 49% of total company revenues.
Analog Devices’ industrial segment’s growth was also supported by Automation, which is benefiting from factory modernization, robotics and reshoring, while energy demand is supported by grid modernization and electrification. Furthermore, ADI’s portfolio of sensing, signal-chain, power and connectivity technologies positions the company to benefit from the transition toward digital factories and increasingly automated production environments.
ADI’s ATE and aerospace and defense are its key secular growth drivers, while much of the broader Industrial business remains below historical consumption levels and customers have yet to materially rebuild inventories. This suggests that the segment’s recovery has both cyclical and structural components. ADI expects its Industrial revenues to increase at a high-single-digit sequential rate in the upcoming quarter.
Automation also presents a long-term opportunity as factories and next-generation robots require greater levels of sensing, motion control, power management and connectivity. However, competition in high-performance analog remains intense, with large semiconductor companies such as Texas Instruments competing across multiple analog categories.
How Competitors Fare Against ADI
Analog Devices competes with Texas Instruments (TXN - Free Report) and STMicroelectronics (STM - Free Report) in the Industrial segment. Texas Instruments competes with Analog Devices in industrial signal chains, precision sensing and power management, especially in PLCs, factory automation and motor control. STMicroelectronics competes in industrial MCUs, motor drivers, sensors and automation systems.
In the robotics space, STMicroelectronics provides sensors, motor control ICs and power management for cobots, AMRs and humanoid robots. In automation, Texas Instruments provides low-power precision analog and sensing for medical imaging, patient monitoring and diagnostics.
Both STMicroelectronics and Texas Instruments compete with ADI in the aerospace and defense business through their radiation-hardened analog and mixed-signal ICs, secure communications and avionics systems.
From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 9.71X, higher than the industry’s average of 7.51X.
ADI Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 66.4%. The consensus estimate for fiscal 2026 has been revised upward by in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can ADI's Industrial Segment Sustain Its Momentum Through 2026?
Key Takeaways
Analog Devices’ (ADI - Free Report) Industrial segment remains a key driver of the company’s broad-based recovery, supported by cyclical normalization and long-term demand for automation, semiconductor testing, aerospace and defense, energy systems and digital factories. Industrial revenues reached $1.97 billion in third-quarter fiscal 2026, which increased 53% year over year and 10% sequentially, representing 49% of total company revenues.
Analog Devices’ industrial segment’s growth was also supported by Automation, which is benefiting from factory modernization, robotics and reshoring, while energy demand is supported by grid modernization and electrification. Furthermore, ADI’s portfolio of sensing, signal-chain, power and connectivity technologies positions the company to benefit from the transition toward digital factories and increasingly automated production environments.
ADI’s ATE and aerospace and defense are its key secular growth drivers, while much of the broader Industrial business remains below historical consumption levels and customers have yet to materially rebuild inventories. This suggests that the segment’s recovery has both cyclical and structural components. ADI expects its Industrial revenues to increase at a high-single-digit sequential rate in the upcoming quarter.
Automation also presents a long-term opportunity as factories and next-generation robots require greater levels of sensing, motion control, power management and connectivity. However, competition in high-performance analog remains intense, with large semiconductor companies such as Texas Instruments competing across multiple analog categories.
How Competitors Fare Against ADI
Analog Devices competes with Texas Instruments (TXN - Free Report) and STMicroelectronics (STM - Free Report) in the Industrial segment. Texas Instruments competes with Analog Devices in industrial signal chains, precision sensing and power management, especially in PLCs, factory automation and motor control. STMicroelectronics competes in industrial MCUs, motor drivers, sensors and automation systems.
In the robotics space, STMicroelectronics provides sensors, motor control ICs and power management for cobots, AMRs and humanoid robots. In automation, Texas Instruments provides low-power precision analog and sensing for medical imaging, patient monitoring and diagnostics.
Both STMicroelectronics and Texas Instruments compete with ADI in the aerospace and defense business through their radiation-hardened analog and mixed-signal ICs, secure communications and avionics systems.
ADI’s Price Performance, Valuation and Estimates
Shares of ADI have gained 33.5% year to date compared with the Semiconductor - Analog and Mixed industry’s growth of 28.2%.
ADI YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 9.71X, higher than the industry’s average of 7.51X.
ADI Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 66.4%. The consensus estimate for fiscal 2026 has been revised upward by in the past 30 days.
Image Source: Zacks Investment Research
ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.